Jet Airways spurts 7% as domestic traffic increases 16.3% in Sept.

Jet Airways is busy adding new cross border flight services, yet it is reducing its foreign pilot strength. The company terminated services of 30 highly paid foreign pilots, bringing the number down to 54, amid pressure of domestic pilots’ union (NAG), which had demanded their removal in April 2017. Earlier in July 2017, the company had asked its junior pilots to accept 30 per cent cut in salary. With this and with expected rise in air traffic to nearly 396 million p.a. in 2020-21 from 282 million capacity currently , the company’s operating profits may see a reversal in December quarter, though not immediately in September, thereby getting the same reflected in FY18 annual numbers. However, heavy debt of more than Rs 9000 crore as against negative reserves and negligible equity would not bring any immediate revival in net profits.

Hence, though not for the long run, traders can bet on the stock for short/medium term gains. Moreover, good air traffic numbers were announced, with domestic traffic increasing 16.3 per cent in September 2017. With the said news , the stock spurted on Monday gaining more than 7 per cent in intra-day trade. As we say, price discounts every event in the stock, so we expect some more momentum in the stock in the coming sessions. Earlier, the stock had given an inverse Head & Shoulders breakout at Rs 552 in June 2017, but witnessed a pullback up to the prior major support line of Rs 460-450. The stock bounced back in the last five sessions and has broken out of the neckline level yet again on Monday. If the stock sustains above Rs 552 on a closing basis, we can expect a positive rally in the stock.